By most accounts, there are fewer Y2K Chicken Littles running around now compared with six months ago when we first addressed the Year 2000 (Y2K) problem in a five-part introductory series. There are clear signs of progress in government and private industry, and some doomsayers of old are sounding decidedly more optimistic.

Remember the story of Chicken Little? An acorn falls from a tree and lands on Chicken Little's head. She panics, rashly thinking that the sky is falling. On her way to reporting the news to the king, she tells all her friends, who blindly take her word and trot along behind her. Ultimately, Foxy Woxy plays on their irrational fears and nearly traps Chicken Little and her friends in a dark cave.

If you ask me, that's a great metaphor for what's been happening with the Y2K problem. In case you don't know, the Y2K problem is the inability for older computers and software to distinguish between the Year 2000 and the Year 1900 because both end in double zeros. (Many older computers and software only use a two-digit date code.) In the case of Y2K, the Chicken Littles are the extremists who are sounding alarms about planes dropping out of the sky and massive power outages. They make their claims, and those who don't know better jump on the bandwagon and fall victim to Foxy Woxy "entrepreneurs" trying to make money off of Y2K by hawking books, so-called "survival kits," and tracts of land in remote areas.

The good news is that the noise isn't as loud or as high-pitched as it once was, and many prominent business leaders and government officials have come out and said that Y2K won't cause major disruptions to our daily lives.

Take Federal Reserve Chairman Alan Greenspan. In his Humphrey-Hawkins testimony before Congress in late February, Greenspan stressed that, "While no one can say that the rollover to the Year 2000 will be trouble free, I am impressed by the efforts to date to address the problem in the banking and financial system."

Federal Reserve Governor Roger Ferguson says he's "cautiously optimistic" that there won't be any major disruptions to global economic activity and calls the chances of catastrophic problems slim. Any disruption "likely will prove to be mild and short-lived," he says. As a precautionary measure, the Fed will print an additional $50 billion in currency for circulation in the event that Americans do panic and make a rush on banks before the new year.

John Koskinen, chairman of the President's Council on Year 2000, has been particularly vocal in debunking Y2K myths. He says that elevators won't go haywire, planes won't fall from the sky, nuclear missiles won't launch inadvertently, and there won't be major failures in the utility, telecommunications, and banking industries. According to Koskinen, some 80% of the federal government's most critical systems are already ready for Y2K.

Still, some areas are expected to come right up against the January 1 deadline, including the State Department and the Federal Aviation Administration (FAA). To show his confidence in the government's efforts, Koskinen has said he will fly from Washington to New York on the evening of December 31 and take a return flight the following morning, on January 1, 2000.

A recent report by the Senate Special Committee on the Year 2000 Technology Problem is relatively optimistic compared with earlier reports. The committee's chairman, Robert Bennett, previously critical of the government's Y2K efforts, now says he doesn't anticipate that there will be major problems with the government's computer systems, thanks to the significant progress being made. "I think we will have a bump in the road, but that it will not be crippling, and it will not last for an undue period of time," he said. Senator Chris Dodd, the ranking Democrat on the committee, estimates that about 90% of the problems that result from Y2K should be resolved within 72 hours, with the rest taking "a bit longer than that."

Even Federal Emergency Management Agency (FEMA) officials are saying that forecasts of doom and gloom from Y2K are greatly exaggerated. "There's no need to hoard, there's no need to take money out of banks, there's no need to head for the hills," said FEMA Deputy Director Mike Walker at a recent press conference on Y2K preparedness. He predicted many small disruptions that won't last or have much of an impact. FEMA is recommending that people have enough money, food, and supplies on hand as if they were preparing for a winter storm.

The American Red Cross's new four-page brochure on Y2K advises that people stock up on enough disaster supplies, including bottled water and nonperishable foods, to last several days to a week. That's a far cry from the suggestions of various doomsayers advocating preparing for six to eight weeks of fallout.

Business leaders also are forecasting only minor glitches. At the World Economic Forum's annual meeting in Davos, Switzerland, earlier this year, Microsoft (Nasdaq: MSFT) Chairman Bill Gates expressed the general consensus when he said, "Of the range that people have thought about in terms of the problems that will occur, it will be below the middle of the panic that some people have suggested."

Even some of the strongest and most vocal Y2K critics are backing off from earlier apocalyptic predictions. Peter de Jager, who runs the Year 2000 Information Center (www.year2000.com), recently posted an article called "Doomsday Avoided," in which he states, "We've finally broken the back of the Y2K problem," though he points out in a follow-up piece that he never said "the beast was dead." Still, it's a significant departure from his famous "Doomsday 2000" article that basically put him on the Y2K map.

Perhaps even more notable is the recent backpedaling by respected Deutsche Bank Chief Economist Ed Yardeni, who has lowered his projection for a major global recession lasting a year to three years to 45% probability from an alarming 70%. Of course, the good economist maintains his position has not changed because if you add in the 25% chance of a modest six-month recession, you still get 70%. But Yardeni does admit, "I have become a bit less alarmed about the readiness of the federal agencies, the banking and finance industry, the national electric power grid, and air traffic control."

Incidentally, in a survey conducted by the Philadelphia Federal Reserve Bank, 33 economists predicted that Y2K will hurt the 2000 economy on average by 0.3%.

Giga Information Group (Nasdaq: GIGX), an information technology consulting firm, also has backed off earlier claims and put out a press release titled "Year 2000 and Embedded Systems: It May Rain, But the Sky Won't Fall." According to Giga, only around 3% of chips have been found to have minor problems. The percentage of chips that experience outright failures is "so small as to be statistically insignificant."

Giga senior adviser Alistair Stewart sums it up nicely: "Expect inconveniences at worst, but not Armageddon. Buy batteries or a generator if it makes you feel comfortable, but you don't need to build a solar-powered generating station. And while most building managers most likely will have updated their systems, if the thought of riding an elevator at midnight on December 31, 1999, makes you nervous, use the stairs."